Health Care Fraud Report: DOJ Obtains $389M From DaVita Healthcare to Settle Medical Fraud Allegations

woman-in-hospital-1051476-m.jpgThe Department of Justice (DOJ) announced on October 22, 2014 a resolution of claims that DaVita Healthcare Partners, Inc., a provider of dialysis services, engaged in a referral and kickback scheme that violated the False Claims Act (FCA). The DOJ announced that DaVita has agreed to pay $350 million to settle the government’s case. The Government’s case was not proven and was only alleged. Liability was not determined prior to the settlement and DaVita has not been shown to have engaged in wrong doing. Our Atlanta and Augusta, Georgia business and health care law firm represents health care providers and businesses and helps them avoid legal pitfalls.

In this case, federal law enforcement alleged that during the period from March 2005 through February 2014, DaVita endeavored to induce physicians who had many patients suffering from renal disease with financial opportunities to partner with DaVita. According to the Government’s case, DaVita first endeavored to identify doctors or medical practices with renal patients then ascertained whether the physician practices were a “winning practice.” “Winning practice” indicated that the physicians or medical practice were well suited to the scheme. For example, in one instance, a physician practice received the “winning practice” designation because the doctors were “young and in debt.” DaVita thus determined which medical practices might be suitable to approach with its proposals, according to the Government’s allegations. DaVita then offered those doctors a financial opportunity to joint venture with it by acquiring an interest in dialysis clinics owned by the doctor. DaVita allegedly manipulated the financial models used to value the transaction in such a way that the doctor(s) would pay less for an interest in the joint venture and receive unusually high returns on the investment. According to the Government’s allegations, DaVita used secondary agreements with the doctor-investors that included, for example, paying the doctors to serve as medical directors of the joint venture’s clinics.

The case was originally filed by David Barbetta as a qui tam case under the FCA, also known as a “whistleblower” case. Barbetta was formerly employed by DaVita as a Senior Financial Analyst for DaVita. Whistleblower claims in the healthcare industry are increasingly common and have been used by the Federal Government to combat healthcare fraud and raise revenue. New whistleblower protections and claims for healthcare providers and employees exist under the Affordable Care Act (ACA). The Anti-Kickback Statute (AKS) is a criminal statute that prohibits the exchange of anything of value to induce or reward referrals of federal health care program patients. The law is broad and creates civil and criminal penalties. This particular lawsuit is styled United States ex rel. David Barbetta v. DaVita, Inc., et al., no. 09-cv-02175-WJM-KMT (D. Colo.). The Government was represented by the U.S. Attorney’s Office for the District of Colorado.

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Source: Press Release

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